Yesterday Apple announced it was revising its Q2 revenue forecast downward. The reason for the rare revision? COVID-19, the new coronavirus, is currently sweeping across the globe. The country that has been hardest hit is of course China, where the virus is believed to have originated.
As a result, some economic activity in the country has come to a standstill. Particularly affected is manufacturing, which saw many factories shut down for weeks and many still not back to full capacity. As a result, Apple said, “that worldwide iPhone supply will be temporarily constrained.” The company also said “that demand for our products within China has been affected” due to all of its retail stores and many third-party retailers having been closed amid the outbreak.
Apple is the first major tech company to announce a revised forecast due to the coronavirus, but as China is the hub of manufacturing for most of the hardware devices the world uses, it’s reasonable to expect other companies to revise their forecasts soon.
Following the revised forecast, Apple CEO also sent an email to all Apple employees discussing the impact of the coronavirus, saying that the company’s first priority “is the health and safety of our employees, supply chain partners, customers, and the communities in which we operate.”
Cook also announced that Apple has now “more than doubled” their donations to support the world’s response to COVID-19. You can read his full email, which was obtained by Bloomberg, below:
Team,
The response to COVID-19 has touched the lives of so many in the Apple family, and I want to thank everyone for their dedication, empathy, understanding, and care. Today, we more than doubled our donation to support the historic and global health response.
Our paramount concern is with the people who make up Apple’s community of employees, partners, customers, and suppliers in China. I also want to recognize the many people across our teams who have been working around the clock to manage Apple’s global COVID-19 response with diligence and thoughtfulness.
Corporate offices and contact centers have reopened across China, and our stores are starting to reopen, but we are experiencing a slower return to normal conditions than we had anticipated. This afternoon, I shared this update with our community of shareholders and investors to note that we do not expect to meet the revenue guidance we provided for the March quarter. Outside of China, customer demand across our product and service categories has been strong to date and in line with our expectations. Apple is fundamentally strong, and this disruption to our business is only temporary.
Our first priority—now and always—is the health and safety of our employees, supply chain partners, customers, and the communities in which we operate. Our profound gratitude is with those on the front lines of confronting this public health emergency.
Tim
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